As Stock Hits New High, eBay Says It’s Raising $3B in Debt Offering, but Not Shopping

EBay’s stock hit a new high for the year, climbing 12 percent this week after reporting strong second-quarter results.

On Friday, the stock increased 2 percent, or 90 cents, to close at $44.85 a share — in sharp contrast to today’s general market losses.

In addition, only a day after announcing positive earnings, the e-commerce and online payments giant disclosed it was raising $3 billion in a public debt offering.

The timing behind the huge raise was to take advantage of today’s low interest rates, eBay said, and not because it had plans to make any large acquisitions.

But that’s hard to fathom given that over the past year, it purchased GSI Commerce for $2.4 billion and PayPal acquired Zong for $240 million, among many other acquisitions. In fact, just this week, it purchased for an undisclosed sum.

“We have been evaluating sources of additional liquidity even though we believe that our strong balance sheet and free cash flow will allow us to finance our organic needs and stock repurchase programs,” said eBay’s CFO Bob Swan. “We also do not anticipate meaningful mergers and acquisitions activity in the near term.”

Because of the debt, eBay was forced to revise its outlook for the third quarter and full year a day after reaffirming it on Wednesday.

The company said because of higher interest expense, it is now expecting 2012 earnings per share in the range of $1.89 to $1.94, and non-GAAP earnings of $2.28 to $2.33. Previously, it was expecting GAAP earnings per share of $1.91 to $1.96.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik